Aussie home prices were up and away for a ninth straight month in October.<\/p>\n
The 0.9% increase in property data firm CoreLogic\u2019s capital city benchmark index released this morning describes an Aussie residential property market on the march, regardless of rising rates, inflation, cost of living pressures and all them other things.<\/p>\n
Three Australian cities have now endured house price rises well into double figures in just the first 10 months of 2023.<\/p>\n
Sydney (10.9%)<\/strong><\/p>\n Perth (10.8%)\u00a0<\/strong><\/p>\n Brisbane (10.2%)<\/strong><\/p>\n Following similar increases over the previous three months, the firm\u2019s research director Tim Lawless says CoreLogic\u2019s measurement of national home values should smack into a new record high by the middle of this month.<\/p>\n \u201cAt this rate of growth, we will see the national HVI reach a new record high mid-way through November, recovering from the -7.5% drop in values recorded over the recent downturn between May 2022 and January 2023,\u201d Tim says.<\/p>\n Via CoreLogic CBA\u2019s Gareth Aird calls the turnaround in property prices since February, \u2018quite remarkable\u2019.<\/p>\n \u201cIndeed the lift in housing values occurred in the midst of the RBA\u2019s tightening cycle (recall that the RBA increased the cash rate by 25bp in February, March, May and June 2023), says the bank\u2019s head of Australian economics.<\/p>\n The RBA\u2019s 400 basis points of tightening since May 2022 has reduced home borrower capacity by ~30%, according to CBA\u2019s global economics and markets research arm.<\/p>\n \u201cBut property prices are now back to their previous peak (reached in April 2022 \u2013 on the eve of the commencement of the RBA\u2019s tightening cycle).\u201d<\/p>\n CBA says now that housing affordability has deteriorated so significantly, the \u201cusual relationship between new lending and home prices has broken down.\u201d<\/p>\n Via CBA<\/em><\/p>\n \u00a0<\/p>\n \u201cHousing loan commitments have fallen by around 30% since May 2022. A decline of this magnitude would ordinarily be expected to be accompanied by an ongoing decline in home prices.<\/p>\n \u201cBut these are extraordinary times,\u201d according to Aird.<\/p>\n Australia\u2019s population growth has surged over the past year. And home building has not kept pace.<\/p>\n \u201cAs a result, vacancy rates have dropped to record lows in most capital cities and the rental market is hot. This has put upward pressure on home prices,\u201d Gareth says.<\/p>\n \u201cForeign buyers are also more active in the market. According to the latest NAB residential property survey the share of total market sales to foreign buyers in new housing markets increased for the fourth straight quarter,\u201d he says.<\/p>\n New sales to foreign buyers have surged \u2013 hitting a 5\u00bd\u2011year high of 10.1% in Q3 23.<\/p>\n Via CBA<\/p>\n \u201cPut simply: there is a supply\/demand imbalance in the housing market,\u201d CBA has concluded.<\/p>\n \u201cPotential entrants into the housing market and renters feel the impact of this mismatch most acutely. Meanwhile many home borrowers with a mortgage are also feeling the pain of significantly higher mortgage rates.\u201d<\/p>\n \u00a0<\/p>\n According to CoreLogic, although housing values are consistently rising across most capital cities, there\u2019s been a clear slowdown in the quarterly pace of growth trend.<\/p>\n The three months ending June 2023 saw capital city home values rise by 3.7%. Since then the growth trend has \u2018drifted back\u2019 to 2.6% over the three months to October.<\/p>\n \u201cThe slower rate of appreciation can probably be attributed to a combination of higher advertised stock levels alongside stretched affordability,\u201d Mr Lawless says.<\/p>\n \u201cWith an acceleration in the flow of new listings coming onto the market, it\u2019s unlikely buyer demand will be able to keep pace as we move through spring amid high interest rates and low sentiment.\u201d<\/p>\n Via CoreLogic<\/p>\n CoreLogic notes Aussie dwelling values rose across each of the capital cities except Darwin (-0.1%) in October with Perth (+1.6%), Brisbane (+1.4%) and Adelaide (+1.3%) continuing to outperform the other capitals.<\/p>\n \u00a0<\/p>\n New RBA boss Michele Bullock will meet with her board on Melbourne Cup Day next week.<\/p>\n Gareth\u2019s team now expects a 25bp rate increase at the November RBA Board meeting, which would take the cash rate to 4.35%.<\/p>\n \u201cA Cup Day rate increase may weigh on near term sentiment in the housing market,\u201d he says.<\/p>\n \u201cBut overall we expect the underlying demand for housing to remain firm against a backdrop of constrained supply and strong rental growth.<\/p>\n He says Aussie households on average expect home prices to continue to lift.<\/p>\n The Westpac MI house price expectations index rose again (a further 3.8% to 160.4) in October \u2013 another new cycle high in the month.<\/p>\n An the WBC\/MI home price expectations index has historically had a close leading relationship with price outcomes, CBA says.<\/p>\n \u00a0<\/p>\n Price outcomes over October were divergent across the country in magnitude<\/em> <\/span><\/p>\n The post Octoberfest: Aussie home values to hit record highs in two weeks; CBA says rebound \u2018remarkable\u2019<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\nVia CoreLogic<\/p>\n<\/h2>\n
\u2018Extraordinary times\u2019<\/h2>\n
Capital gains<\/h2>\n
Bracing for race day<\/h2>\n
Octoberfest: CoreLogic<\/h2>\n
\nPrices lifted in all capital cities apart from Darwin<\/em>
\nDwelling prices rose by 0.8% in Sydney following similar sized gains over the previous three months. <\/em>
\nSydney home prices have now increased by 11.6% since the trough in January.<\/em>
\nMonthly price rises also posted in Brisbane (1.4%), Adelaide (1.3%) and Perth (1.6%). Values rose more modestly in Melbourne (0.5%) and Canberra (0.1%)<\/em>
\nDwelling prices across the 8 capital cities posted a larger gain for houses (1.0%) compared to units (0.7%) in October. This has been a familiar trend since prices turned earlier in the year.<\/em>
\nPrices also firmed across regional Australia. <\/em>
\nCoreLogic\u2019s regional benchmark index increased by +0.7% in October.<\/em>
\nCoreLogic calculates the flow of new capital city listings has also surged to be almost 12% higher than a year ago. <\/em>
\nBut total listings (ie: new listings plus re\u2011listings) remain lower than this time last year and below the previous five year average. The upshot is that home sales are tracking only slightly above the five year average. <\/em>
\nErgo sum: home buyer activity not expected to be a tailwind on consumer spending.<\/em><\/p>\n